The Brookings Institution today launched a new economic policy program: the Hamilton Project. This initiative will advance an economic strategy to restore America’s promise of opportunity, prosperity and growth—and inject new policy options from leading thinkers across the country into the national economic debate.
“Our nation’s large fiscal imbalance and inadequate investment in key growth areas is placing America’s promise of economic growth and opportunity at risk,” said Peter Orszag, project director and Brookings Institution Senior Fellow. “The Hamilton Project is offering a strategy that is strikingly different from theories driving current economic policy.”
“As we celebrate the 90th anniversary of Brookings, we are pleased to be launching this new and exciting initiative featuring the ideas and proposals of some first-rank economic thinkers,” Brookings Institution President Strobe Talbott said. “We anticipate that the policy options will spark a much needed national debate about our economic future.”
At the Brookings launch event, Senator Barack Obama (D-IL) and the Rev. Jim Wallis, a founder of Sojourners and author of God’s Politics, participated in a discussion of the project’s white paper, “An Economic Strategy to Advance Opportunity, Prosperity and Growth.” The paper calls on the nation to address the two most significant risks to economic growth and opportunity: the country’s large fiscal imbalances and inadequate investment in key growth enhancing areas. The project’s approach to these challenges reflects a judgment that:
- Broad-based economic growth is stronger and more sustainable than growth accruing to a small segment of the population;
- Economic security and economic growth can be mutually enforcing; and
- Effective government can enhance economic growth.
Going forward, the Hamilton Project will release a series of policy proposals from leading economic thinkers and academics—grounded in evidence and real world experience—focusing on four critical investment areas: education and work; innovation and infrastructure; savings and insurance; and effective government.
To begin the debate about economic policy options, the project also released this morning three new papers focused on education and savings:
- Identifying Teacher Effectiveness Using Performance on the Job—Effective teachers are critical to our children’s future. This paper tackles the controversial issue of how teachers are hired and evaluated. It shows that students’ performance is little affected by whether their teachers hold traditional teacher certifications, and that regardless of whether they are certified, some teachers are consistently better than others at helping their students learn. The authors therefore recommend that school districts allow a broader range of initial qualifications and hire a greater number of teachers, but then award tenure only to those most effective on the job. This approach would not only improve student performance but also help address the looming teacher shortage in the country. The paper also recommends that the federal government provide funding for the development of teacher effectiveness measures and for incentives to encourage the most effective teachers to work in schools in high poverty areas.
- Improving Opportunities and Incentives for Saving by Middle- and Low-Income Households—Many Americans retire without having accumulated sufficient savings to enjoy a comfortable retirement. Much of the problem arises because families lack time to focus on saving decisions, and because the tax incentives to save for many middle- and low-income households are weak. This proposal would provide new tools to address both issues. To make it easier to save, the proposal would require every firm (with potential exceptions for the smallest businesses) to automatically enroll new workers in a traditional defined benefit plan, a 401(k), or an IRA. Workers could always choose to opt out of these savings vehicles. The proposal also would replace the existing “upside down” set of tax incentives for retirement saving with a simple 30 percent match for everyone.
- Summer Opportunity Scholarships: A Proposal to Narrow the Skills Gap—During the regular school year, low-income and high-income students progress at roughly the same rate. During the summer months, however, reading and math skills decline disproportionately among low-income children. To mitigate this loss, the proposal creates Summer Opportunity Scholarships to finance summer school or other summer enrichment programs for low-income students.
The project also will release two additional papers in the near future. One will focus on more effective ways to measure and then improve productivity within the government. The other would reduce the compliance costs associated with federal income tax returns through a system of return-free tax filing.
The project is named after Alexander Hamilton, the nation’s first treasury secretary, who laid the foundation for the modern American economy. An immigrant who was born into poverty and self-schooled in his early years, Hamilton symbolizes the traditional American values of opportunity and upward mobility that motivate the project’s work. He fostered the nation’s capital markets, encouraged commerce, and stood for sound fiscal policy.
The Brookings Institution is a private nonprofit organization devoted to independent research and innovative policy solutions. Celebrating its 90th anniversary in 2006, Brookings analyzes current and emerging issues and produces new ideas that matter – for the nation and the world.